ED SCHULTZ, HOST: Good evening, Americans, and welcome to THE ED SHOW from New York tonight.

No stories hit my hot button more than this one. I have waited for this story, this review that the president has ordered about the attempted terror attack on Christmas Day. It‘s all over the news. Right?

OK. So the president meets with his people today, all the department heads, and he comes out and talk to the American people and the world.

We knew about the red flags. This was not an intelligence problem.

It was not a collection problem. OK?

And we just didn‘t connect the dots. That‘s what it was all about.

We didn‘t communicate.

Now, the righties out there, they‘re waiting for the moment to pin this on President Obama and everybody around him. Right?

Wait a second. We had the biggest rearrangement of government in the history of the United States in the last administration. After we got hit on 9/11, we had to form the Department of Homeland Security because all of these agencies, the CIA, the FBI, the National Security Agency, local law enforcement, nobody could talk to one another.

So here we are. Did that work? Did that really work, or was this just the due diligence of American bureaucracy just not working? What happened here?

Oh, but we‘ve got to pin it on Obama. We can‘t wait to pin it on him because he‘s weak on terror.

You know, when this is all washed out, we are going to find out—and we‘ll dig out the sound bites because they‘re in the archive. You know, I remember Joe Lieberman—oh, we just have to have the rearrangement of government so we can protect America. I remember all that.

I remember Dick Cheney coming out and saying that we have to do this because we‘re going to get hit again, that we just—well, can we just say this, that we kind of got lucky on Christmas Day? There were some people that got after it and it was a failed attempt?

But we knew about the red flags, we had the intel. It‘s not a collection problem, it is a communication problem and we didn‘t connect the dots.

So much for the Department of Homeland Security. I hope we get it right. This was not Obama‘s fault at all.

And the Republicans, another story. A Republican is saying that the Democrats are worse than terrorists. This comes out of Minnesota. Who knew that we had a bigger nut in Minnesota than Michele Bachmann?

I‘ll introduce you to the Republican candidate, Allen Quist, in just a moment. I‘ll show you his crazy sound bites and how he‘s going to get a response from radical Democrats that he‘s trying to unseat in that state.

Another story tonight, the president meets with Nancy Pelosi. What should the final health care bill look like? A chairman of one of the committees, George Miller, a major player in all of this, is going to talk about the negotiations. We‘ll have that later on in the show.

Another story coming up, another Minnesota Republican. Well, he‘s got the Tea partiers‘ hearts just beating again. It‘s kind of the Michele Bachmann style from the Midwest.

Allen Quist—now take a look at this guy—he‘s running to be the Republican nominee for the House seat in Minnesota‘s first district. Looks like a pretty harmless dude. Doesn‘t he?

He wants to challenge Democratic Congressman Tim Walz. He‘s a military veteran, too, I might add.

Now, Quist attended the Wabasha County Republicans‘ Christmas party last month and got a little worked up talking about why he wants to run for Congress. He said fighting Democrats is more important than fighting the terrorists.

(BEGIN VIDEO CLIP)

ALLEN QUIST ®, MINNESOTA HOUSE CANDIDATE: I, like you, have seen that our country is being destroyed. I mean this is—every generation has had to fight the fight for freedom. This is our fight and this is our time. This is it.

Terrorism, yes. But that‘s not the big battle. The big battle is in D.C. with the radicals.

SCHULTZ: Whatever happened to Minnesota? I thought we were kind of just a fair-minded state that didn‘t have all this radical talk.

Now, he made that comment two weeks before the alleged terrorists tried to blow up an American airliner Christmas Day. Since then, he hasn‘t said a word about it. There is no apology on his campaign Web site.

These Tea partiers are using the exact same rhetoric that Bush used to talk about al Qaeda to describe the United States president and his party. Right?

Democrats are radicals. They hate freedom. They want to destroy this country. And Quist says they have no American values?

(BEGIN VIDEO CLIP)

QUIST: Conservative means being absolutely committed to the principles that make this the best country in the world. That‘s what it means to be conservative—national sovereignty, right to life, right to property, freedom right down the line. To be conservative is to believe in these principles.

The radicals do not believe in any of them. None! That‘s why we‘re going to take them out.

(END VIDEO CLIP)

SCHULTZ: Take them out? I hope he means out of office.

Folks, this is hate speech at its highest level. It‘s fear mongering to the point of making people believe their own lives are in danger.

Gosh, if we elect any of these people, I wonder if I‘ll lose some of my property in North Dakota. Kind of a harmless place.

Tell me what you think about our telephone survey tonight. The number to dial is 1-877-ED-MSNBC.

My question tonight is: Do you think that the Tea Party attacks are patriotic or un-American? Press “1” for patriotic, press “2” for un-American. We‘ll bring you the results later on in the show.

Well, I can‘t do this story unless I introduce to you this radical that this guy Quist wants to take out of the United States Congress.

I have to tell you, I certainly didn‘t wear the uniform of this nation for 24 years-plus to be equated with terrorism. This poisonous kind of spiteful speech, it harms the public rhetoric and my people are tired of it. Folks across the country are tired of it.

What they want is they want us to discuss these issues that are affecting their lives—jobs, health care. I don‘t find it real radical, Ed, that I want to help provide health care for --- affordable health care for all Americans. I don‘t find it radical that we want to try and make sure our economy is strong. I don‘t find it radical that we want to have an energy policy dependent on America, not the Middle East.

And this type of rhetoric does nothing to have us move in that direction. So I think we do have to address it.

I‘m appreciative of you, of bringing this up, because I do think it poisons the dialogue. And the idea of a high school teacher like myself, football coach and 24-year guardsman somehow being worse than these people who killed people in New York and have tried to do so again is so incredibly distasteful, it almost makes me wonder if it warrants a response. But I think it does.

SCHULTZ: Yes. Well, we did some checking on your future candidate, opponent there, Mr. Quist. He was a teacher at Bethany Lutheran College. He has no military background whatsoever, as you do.

It just seems to me that the Republicans are going to do everything they possibly can to target and take out—seat removal, so to speak, not kill you. “Take out” used to have a different definition until the Republicans decided to put it to elections.

WALZ: Well, I hope that‘s not the case. I think I add quite a voice to the Congress.

I‘m the highest ranking enlisted soldier that‘s ever served there. And I‘m very proud of the work we‘ve done in passing some of the best things for the VA and our veterans in the history of this nation. So I would hope they wouldn‘t do that.

SCHULTZ: Is Michele Bachmann emboldening some of these other candidates around the country? I mean, her district is not very far from yours. I mean, it‘s getting a lot of play in that part of the country.

What do you think?

WALZ: Well, ironically enough, this gentleman was her mentor early. And his wife is actually employed by the congresswoman. So there is a tight connection there.

Yes, I think it‘s that same type of rhetoric we‘ve seen. I don‘t engage in it. I think the reason I received nearly 63 percent of the vote last time is that I have a moderate, rural district, big farming district, it includes the Mayo Clinic. But these are good folks that don‘t see their neighbors as Republican or Democrat and don‘t want to demonize them.

So I don‘t think they buy into this, but I think you‘re right, Ed, there‘s no doubt that this is the type of rhetoric. I saw it at my town hall meetings on health care in August.

But I have to tell you, too, Ed, I see some of those people who showed up there at those now. They‘re a little tail between the legs, I think, and kind of embarrassed about that. Not that I—not the positions that they would express in opposition, but this inflammatory rhetoric.

Congressman Walz, good to have you on tonight. The best of luck to you. We‘ll be around. Thanks so much. I appreciate it very much.

WALZ: Thanks.

SCHULTZ: For more on this story in a moment—but first I have some breaking news to bring you.

The Associated Press is reporting that North Dakota Democratic Senator Byron Dorgan says he will not seek another term in the Senate. That is shocking news to me.

Byron Dorgan, I have known this man for 25 years. I have been very close to him for the last 10 years. He is a fabulous person. He has done a lot for the great state of North Dakota. He has been a real populist.

In recent polls in the state of North Dakota, sitting Governor John Hoeven, there‘s a lot of talk about whether he is going to run for that Senate seat. In the last poll, he was up on Byron Dorgan by 20 points. Whether that pushed Senator Dorgan away or not, but Dorgan has been around the Congress for some 30 years.

This is a big story. He has been a stalwart Democrat, a fighter for the middle class. It‘s sad news tonight that Byron Dorgan is not going to run for the United States Senate seat and seek re-election.

A.B., what do you make of this story? Byron Dorgan has been looked upon as a real fighter for the middle class in this country, and this is a man that has given a lot to the Democratic Party and the progressive movement.

A.B. STODDARD, ASSOCIATE EDITOR, “THE HILL”: Well, Senator Dorgan knows that these races are very expensive and that the environment for Democrats is terrible this year. Democrats are on the defensive on the economy, on joblessness, on a domestic agenda, on health care reform, unfortunately, Ed, which is sinking in the polls every day. And obviously, possibly on the issue now of terrorism.

We don‘t know what it‘s going to look like come August, September, October, but it‘s going to be a tough year for Democrats across the board. And looking at a governor who is in a strong position, at this point, in January, is a tough uphill battle, and he made a decision that was right for him. I don‘t know if it was all political, but it‘s a tough year for Democrats.

He‘s been in charge of the Democratic Policy Committee. He has held countless hearings on abuse—fraud and abuse on Iraq and Afghanistan. He has been a fighter for the middle class time and time again.

Most recently, his drug re-importation amendment was shot down. He fought very hard on that.

Steve McMahon, I would put Byron Dorgan in there with some of the great Democrats that have fought for people. I don‘t expect New York City or Los Angeles, California, to understand the impact of this decision by the longtime sitting senator.

What do you think?

STEVE MCMAHON, DEMOCRATIC STRATEGIST: He certainly does epitomize the notion of the old-time prairie populist. He was somebody who cared about working families, about the farm families that are still left in North Dakota, about people who don‘t have lobbyists to represent them. They had Byron Dorgan. Or, I‘m sorry, Kent Conrad.

SCHULTZ: Well, he‘s also in North Dakota.

MCMAHON: And they have both of them. But there is a prairie populist, Ed, that I‘m looking at right now who is from North Dakota who might make a fine replacement, who can take the fight to the Republicans like nobody I‘ve seen lately.

SCHULTZ: Well, I can‘t because I think there is a law in North Dakota, you have to be a resident for five years before you can run. Wendy and I have been living in Detroit Lakes, Minnesota, for the last two years. So let‘s just squelch that right there.

MCMAHON: I got you. But in any case...

SCHULTZ: But, you know, if I was still there, I‘d love to run against the empty suit, because that‘s what I used to call John Hoeven, the sitting governor.

He‘s not really a middle class kind of guy. He is a country club snob. But that‘s another story.

(LAUGHTER)

MCMAHON: Well, you‘re right about Byron Dorgan.

SCHULTZ: A little inside politics there.

You know, look, Byron Dorgan has been a real respected opinion in caucus. He is a man who has really fought for the middle class. He is a guy who understands rural America, has fought for farmers like you wouldn‘t believe.

He has talked a lot about trade policies. He‘s been a very strong voice on the Commerce Committee.

In fact, I spoke with Byron today on the radio and he talked about what has to be done when it comes to reforming Wall Street and reeling these banks in, and accountability of the Federal Reserve. He has been a real champion of the truth.

And this man has got an impeccable career and has just absolutely outstanding character. This is an American that the United States Senate is going to miss.

A.B. and Steve, thanks for being with us tonight. Appreciate your time.

Coming up, on the campaign trail President Obama promised that health care would not be decided behind closed doors. That‘s a promise he has broken.

Chairman George Miller is going to come out of the cloak room with an update on that.

And Ron Paul is with us tonight taking aim at Dick Cheney at the bottom of the hour.

All that, plus a fresh Bachmann “Psycho Talk.”

That‘s all right here on THE ED SHOW on MSNBC.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Closed-door negotiations to merge the health care bills continued today with House progressives and the American people left out of the process. Is that the case?

Right now, President Obama is meeting with Nancy Pelosi, Harry Reid and other Democratic leaders to discuss the final bill. Earlier today, Speaker Pelosi met with the four chairmen who helped write the House version to talk about priorities in these negotiations.

Joining me now is one of those folks who met with the Speaker today, Congressman George Miller, who‘s the chairman of the House Education and Labor Committee.

C-SPAN executive director Brian Lamb has made a request that these negotiations be carried on C-SPAN, televised. And this is something President Obama talked about on the campaign trail.

How much of a PR black eye would this be if this does not happen?

Because a lot of people want to see it. What do you think?

MILLER: Well, we‘re going to do this in the most open and transparent manner that we can. When we were writing the bill in the House of Representatives, we had over 100 hours of hearings that were completely public, some which were televised.

The bill that we‘re considering now is the House vehicle. Essentially, it‘s been on the Internet since July. It was—the bill and amendments to the bill were on the Internet for 72 hours before we took it up. The Senate‘s gone through their process.

What we‘re not going to give in to is that the Senate, from the

Republicans in the Senate, in an effort to kill this bill, from

Thanksgiving until Christmas, made every effort—or actually before then

every effort that they could to delay this bill because they know that time in Washington, D.C., is the enemy of getting things passed. And they‘ve tried every effort.

Now what they want do is have a motion to go to conference so that they can vote a cloture vote, they take up more days, more weeks of time. And we‘re not going to give into that.

We‘re going to do this is in an open fashion, it‘s going to be on the Internet. We‘re going to discuss it with the press. We‘re going to discuss it at home. We had over 3,000 town hall meetings and events in our district throughout August.

SCHULTZ: So why not have it on C-SPAN?

MILLER: Well, because I‘m not sure what form yet these meetings are going to take yet. That‘s part of what the meetings at the White House are about.

How are we going to handle this legislation? Because we know that the goal of the Republicans still is not to make this legislation better, but to kill this legislation so that Obama will have a defeat and they will say that that‘s a failed administration.

We‘re not going to let them do that. Time and again, when the Republicans were here, you were watching this process for six years. And in those six years, very often the first time we heard a bill was coming to the floor when they announced it was coming to the floor.

SCHULTZ: They don‘t bring anything to the table. You got that right.

I mean, if this is to shut them out because they‘ve got no ideas and all they‘re going to be is disruptive and obstructionists on this, I get that. But I do think that a lot of Democrats in this country are wondering, all right, what‘s going on behind closed doors here? What kind of arm-twisting‘s happening here?

MILLER: It‘s not behind closed doors. We started 10 days ago talking to our caucus.

We asked our caucus to meet with their constituencies to give us the feedback. The Speaker set up an e-mail address where they could talk to the chairs, and back and forth, to try to make this—to try to make this as open as we possibly can. But we have got to get this legislation done.

Do not believe that the people who wanted to defeat this bill are now giving up because the House and the Senate have passed a bill. They‘re looking for another opportunity to kill the entire bill.

SCHULTZ: How involved is the president going to be down the stretch here?

MILLER: No, no. I think we‘re meeting perhaps tomorrow afternoon. I don‘t know if that‘s it. But that‘s what Leader Reid and Senator Durbin, Steny Hoyer and Speaker Pelosi are talking to the president about, how this process—what shape it will take, the involvement of the administration, and how we work it out.

SCHULTZ: Is the public—finally, is the public option dead?

MILLER: I don‘t know. I don‘t know whether it is or not.

There‘s a lot of different options on the table. The Senate created a basketful of different kinds of options. But what is not dead is the idea that we need a mechanism to inspire competition within the insurance industry and to have accountability and a downward pressure on prices.

The original public option saved $150 billion over 10 years. That‘s because of downward pressure on prices for taxpayers and for rate prayers.

We‘re not giving up on that process. If the Senate has a different kind of option that works, we‘ll take a look at that.

Coming up next in my “Playbook,” NBA commissioner David Stern. This guy, in my opinion, needs to man up and tell his millionaires out the floor, you shouldn‘t be owning guns because it‘s just a big PR problem.

We‘ll crash the boards on that on THE ED SHOW.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In my “Playbook” tonight, this is a cultural issue that I‘ve wanted to talk about for a long time. And now this comes up.

Two Washington Wizards basketball players in the NBA, Gilbert Arenas and Javaris Crittenton, I‘m sure they‘re good guys. They‘re being investigated by local and federal authorities after reports that they pulled handguns on each other in the Wizards‘ locker room.

Now, Arenas denies that happened. He did admit to storing several guns in the locker room, but he says that they were unloaded and he did that so he could keep them away from his kids so they wouldn‘t get a hold of them. And I understand that. But no word yet on penalties that these guys are going to be facing. The NBA, of course, bans players from bringing guns into basketball arenas or into the practice facility.

Folks, that just doesn‘t go far enough. Professional athletes in this country are viewed by impressionable kids as stars. That‘s the life they want to live. They want to be just like them. They work hard because someday maybe they‘ll get a chance to be a big-time basketball star in the NBA.

With the visibility comes the responsibility.

I‘ve often wondered, why doesn‘t David Stern, who‘s been the commissioner of the NBA for a long time, just put his foot down and say, if you want to play in our league, you can‘t own firearms? We are in the image business. We‘re not in the thug business. We‘re in the business of making sure that we send a good message to the youth of this country.

And I‘ll guarantee you that there is probably some kid out there saying that, well, gosh, I can own a handgun because my favorite player on this NBA team does. That‘s how kids think.

And I think it is a sad day when we have people in a position of responsibility who can make a difference and just pass the buck because they‘re a good player and we‘re really afraid to discipline these players. Telling them that they can‘t bring it into the facility isn‘t good enough.

If you want to play in the NBA, you can‘t own firearms. Because with the visibility comes the responsibility, and there is a lot of people that look up to the players in the NBA. At least we want them to look up to the players in the NBA, because the youth of America pays a lot of attention to them.

A sad day for the league, that they have to deal with this.

Coming up, Republican Congressman Ron Paul and Democratic Congresswoman Jan Schakowsky have one thing in common. They both want former Vice President Dick Cheney to just shut up and go away.

Plus, Michael Steele is predicting failure?

And Michele Bachmann has got to lay off the tea.

You‘re watching THE ED SHOW.

It‘s all coming up, right here on MSNBC. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for joining us tonight. Breaking news at this hour out of the Senate is that long-time North Dakota Senator Byron Dorgan has said he will not seek re-election in 2010. We‘ll have more on this a little bit later on in the program with our panel. Byron Dorgan saying he will not seek re-election. The Democrat from North Dakota saying that he‘s going to call it a career in the senate. He‘ll be with me in the coming days here on this program.

Now, less than a couple hours ago, President Obama spoke after meeting with his national security team to discuss the investigations into the Christmas day terror attempt. The president made it clear that the security breach represented a systematic failure of intelligence. He also made sure to emphasize his commitment to defeating al Qaeda.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The US government had sufficient information to have uncovered this plot and potentially disrupt the Christmas day attack. But our intelligence community failed to connect those dots.

Just as al Qaeda and its allies are constantly evolving and adapting their efforts to strike us, we have to constantly adapt and evolve to defeat them. Because as we saw on Christmas, the margin for error is slim and the consequences of failure can be catastrophic.

(END VIDEO CLIP)

SCHULTZ: To break down the president‘s speech at this hour, let‘s bring in NBC terrorism analyst Evan Kohlmann.

Evan, good to have you on tonight. I thought the president really capsulized what took place. We got a communication problem. Is that how you read it?

EVAN KOHLMANN, NBC NEWS TERROR ANALYST: Yeah. I think he‘s dead-on. I don‘t think there is any secret about that. If you look at the headlines, the headlines just in the last year alone, you‘ll see that there are still the same turf battles going on that have been going on for years. I mean, there‘s just been a huge fight between the CIA and other agencies about who controls the intelligence coming out of the US embassies abroad.

SCHULTZ: But the Director of National Intelligence was supposed to cure all of those woes, and also the Department of Homeland Security was basically formed, and we went through the biggest re-arrangement of government in the history of the United States, to handle such situations as this, so the left hand knows what the right hand is doing and that they communicate through the ranks.

KOHLMANN: I‘ll tell you what the two problems that have occurred. Number one, we‘ve just created new bureaucracies. That‘s one of the most underlying critical issues is that the agencies that we‘ve created to try to address the gaps that were there have become their own bureaucracies. And there are information sharing problems within those agencies themselves.

Then there is simply the other issue, which is that within the government agencies that are supposed to distribute this information to each other, there is a critical lack of communication. And what‘s worse is that with some of our closest allies abroad, the United Kingdom included, we are not sharing basic information about critical on-going terrorism cases. There is not open communication between, say, Scotland Yard and the FBI, like there should be.

Again, it‘s not a secret. These things are in the headlines. Just a few years ago, we had a case in the UK where British police were sent scrambling after a hard-core al Qaeda member, someone who was an instructor at a training camp, because his identity was outed by US law enforcement in the media here in the United States.

SCHULTZ: It takes smart people to just communicate and make sure—and do the due diligence and take it through the chain. That‘s what it sounds like to me.

Another issue of transferring detainees to Yemen and closing of Gitmo.

This is what the president had to say about all of that today.

(BEGIN VIDEO CLIP)

OBAMA: Some have suggested that the events on Christmas day should cause us to revisit the decision to close the prison at Guantanamo Bay. Given the unsettled situation, I‘ve spoken to the attorney general and we‘ve agreed that we will not be transferring additional detainees back to Yemen at this time. But make no mistake, we will close Guantanamo prison, which has damaged our national security interests and become a tremendous recruiting tool for al Qaeda.

(END VIDEO CLIP)

SCHULTZ: How long is Yemen going to be an unsettled situation? I think this is a definite change. Your thoughts?

KOHLMANN: Yeah, it is going to be that way for a long time. Yemen has been this way now for going on several decades. Long before there was an al Qaeda, groups like the Red Army Faction found a home in Yemen. This is not going to be something we are going to solve tomorrow.

But I think the president is correct in the sense that we have to do something about this. We have to address the critical gaps that are left in our security. And we don‘t have room for error. We make one mistake and 200-some-odd people are going to lose their lives. We make several errors in a row, it could be even more catastrophic.

This is reform that should have taken place years ago. Why it has taken this long to make motion on it, it is very difficult to answer that, especially when we had an administration that was supposedly dedicated to war on terrorism. What happened to the reforms that were promised in the 9/11 Commission Report? I think these are fundamental questions we all need answers to.

SCHULTZ: Evan Kohlmann, good to have you with us tonight. Thanks so much for your insight.

SCHULTZ: Let me turn to Democratic Congresswoman Jan Schakowsky of Illinois tonight to address the politicization that‘s taken place surrounding this entire event that unfolded on Christmas day and the aftermath of it all. Congresswoman, nice to have you with us tonight.

REP. JAN SCHAKOWSKY (D), ILLINOIS: Thank you, Ed. Happy New Year.

SCHULTZ: Happy New Year to you. We rearranged government to handle this, so these agencies could talk to one another. Your take at this hour on what we know?

SCHAKOWSKY: Well, I think the one that keeps Americans shaking their head is that this young man‘s—this terrorist‘s father actually made a report. This was no ordinary guy. And turning in his son and saying that he was worried about it, that is, to me, the most obvious lapse. How come that didn‘t get translated into this kid‘s visa, the ability of him to travel to the United States, his appearance or lack of on a watch list?

I assure you, and the chairman of the Intelligence Committee on which I serve has said that we‘re going to be looking into all of that. But I think the underlying issue of communications has to be reinforced. You‘re right. We did set up the Director of National Intelligence for that very purpose.

SCHULTZ: To handle this. You know, pick up the phone and call the Director of the National Intelligence, let him know what the heck is going on here. I want to ask you about this—where was all this during the Bush/Cheney years? Here we have new screening. We have new detection methods. We have air marshals now, international cooperation. Lists are being redone. And by the way—and this is not getting enough play, in my opinion—the president of the United States has targeted 14 countries that if you‘re traveling from that country into the United States, you‘re going to get checked out big-time.

Where‘s Dick Cheney on this, congresswoman? Where were they on that?

SCHAKOWSKY: He is—first of all, he is so far off base right now. I think all of us ought to be acknowledging the rapid response of the president of the United States and all of those under him in order to make immediate changes. You‘ve listed some of them. Those lists are being scrubbed. People are being updated. There are pat downs in 14 countries that are coming into the United States. All of those things have happened in the last few days, really.

During the Bush administration, which of course is the time when we had the biggest terrorist attack in the history of the United States, -- the vice president has a lot to explain, why now? He would be coming out and targeting the president of the United States for being somehow not serious about addressing this problem? It is absolutely shameful that he‘s doing this kind of fear mongering, that he‘s raising these questions about the fitness of the president of the United States to protect us. It‘s unprecedented and it‘s certainly unwarranted.

Let me turn now to a Republican who‘s spoken out against former Vice President Dick Cheney a number of times, Congressman Ron Paul of Texas, who has also been an advocate of not doing international intervention when it comes to terrorism and when it comes to fighting terrorism, because that‘s not the way to do it, in his opinion.

Congressman, good to have you with us tonight. I appreciate your time.

REP. RON PAUL ®, TEXAS: Thank you.

SCHULTZ: Is the rhetoric that Cheney and some of the Republicans are throwing out—Michael Steele did it today as well—is that hurting our effort, in your opinion?

PAUL: I don‘t know. I haven‘t quite figured all that out. My attack was not initiated by myself. I was asked about it, what I thought about him speaking out. And I just thought that he had had his eight years to try to do things and left us with a lot of problems, so it was sort of out of character to come back and start chipping at the president for this.

Really, what my beef is, is that foreign policies never change. There is a lot of talk about when Republicans are running against the Democrats, like when we ran against Clinton, we were the peace party and there was too much intervention. When Obama runs against Bush, we have to have less—we‘re going to bring our troops home, end the war. Then they get in and they do the same thing.

See, I can‘t see any difference in reality between the foreign policy and Obama and George Bush. So for Cheney to come in and say, oh, this Obama, he‘s horrible, he‘s horrible—but he ought to say, hey, keep up the good work, because in Congress, you know, the Republicans are more supportive of Obama than the Democrats are. I mean, they think that the Republicans will pass the bill to get the additional troops for Afghanistan.

So there is a lot of hypocrisy going on here. I‘m just trying to argue my case that I think we should have less intervention and less pretense that there is a real difference between the two parties.

SCHULTZ: What evidence do you have, congressman, or why do you believe that al Qaeda would be less aggressive to kill Americans if we weren‘t doing international intervention and going and fighting them on their soil and going after them?

PAUL: Well, they didn‘t exist until we got over there. We helped create them. Matter of fact, we even—our CIA helped radicalize the madrassa schools, because we were allies with them when we trying to fight the Soviets and put them out of Afghanistan. Yes, we helped initiate that because they understood our argument, hey, look, these Communists are bad people; they‘re invading your country; they want to take over. So they accepted this idea, well, we‘ll use religion to radicalize.

I don‘t happen to believe that al Qaeda‘s one unit. I think they‘re just scattered number of Muslims who have been influenced by the radical element of the Muslim religion, which I think is rather minor, just like there is in the other religions, including the Christian religion. I think they can advocate violence.

So I think that‘s what it is. I don‘t think there is a monolith. I don‘t think for a minute that Osama bin Laden is running this show. I think this is not—well, partially philosophic, but it is theologic, too. They get aggravated and angered by us dropping bombs on them, which Obama continues to do, which Bush did, Clinton did. They all do it. We only have one foreign policy. They get angry.

SCHULTZ: Congressman, you‘ve been an advocate for civil liberties and privacy and protection and such stuff as that. How do you feel about some of the measures that President Obama has taken in the wake of this, more screenings at airports? Heck, we got the Patriot Act. You can listen to anything you want to listen to.

PAUL: Yeah.

SCHULTZ: Just a list of things that this administration has put out domestically to try to curb any type of attack. How do you feel about this? Is he doing enough? Not doing enough? What do you think?

PAUL: Well, some of it. Certainly, we ought to look at some of these people coming in from countries that we‘ve put on the terrorist list. That would be common sense.

SCHULTZ: Do you agree with him on the 14 countries that he put on the list?

PAUL: Yeah. Yeah, matter of fact, I have made a suggestion—interesting enough, I had something passed right after 9/11 that we ought to be very careful with those countries that we had put on a list. I think there were four at that time. The bill passed in the House. In the conference they removed that. They didn‘t want to do that. I thought, well, if you use your logic, this is a lot better than putting us through the harassment and taking our shoes off and our belts off and stealing our toothpaste and all these things.

We spend 75 billion dollars trying to get intelligence. Then when somebody comes with a hot lead, we can‘t even handle it.

SCHULTZ: It is amazing.

PAUL: Even with all this effort—with all this effort, we‘re missing the whole point, is we don‘t ask the question: why are they so angry? And if it is what I say, because we‘re there, all this effort will be for naught.

SCHULTZ: Congressman Ron Paul, great to have you with us tonight. I appreciate you being on. Thanks so much.

PAUL: Thank you.

SCHULTZ: You bet. Coming up, I got a dandy in psycho talk for you, brought to us by the Tea Party queen herself. You won‘t want to miss it. Stay with us.

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SCHULTZ: In psycho talk tonight, Minnesota Congresswoman a Tea Party Queen Michele Bachmann. She seems to be on a quest to put the wing-nuts of America in charge of the Republican party. Here‘s what she said in a recent radio interview.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What should the Republican party be doing to capture this political energy and turn it into votes next year?

There‘s no question that the heartbeat of the Tea Party movement would be more in line with the mission state of the Republican party, certainly than that of the Democrat party. So if the Republican party is—is wise, they will allow themselves to be redefined by the Tea Party movement.

SCHULTZ: Right. Because the candidate the Tea Partiers picked to run for Congress in New York‘s district 23 really did a great job. You‘ll remember, he managed to lose in a Republican-leaning district. If the Republican party is wise, they would run away from the Tea Partiers as fast as they possibly can. Of course, no one is saying Republicans are wise. Are they?

And Michele, let me just remind you of some of the folks you want to embrace. You would be redefining the Republican party as ignorant and hateful. Saying that embracing the Tea Partiers would be a wise idea for the Republican party, folks, you got it, it‘s psycho talk.

Coming up, Michele Bachmann‘s not the only Republican who‘s crossing the line. I‘ll put a former assistant to President Bush in the hot seat next. You‘re watching THE ED SHOW on MSNBC. Stay with us.

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SCHULTZ: Welcome back to THE ED SHOW. Michele Bachmann thinks the Tea Party movement can be the heartbeat in redefining the Republican party. Here‘s some video from the Tea Party rally that was held outside the Capitol last month.

Those are protesters dressed as President Obama, Nancy Pelosi, and Harry Reid, handcuffed, whipped with chains, and covered in fake blood. Republicans, really look at this and see the future of your party. Is this what you want on the heat seat tonight?

Republican strategist Brad Blakeman. Brad, you‘re a pretty level-headed guy. Do you think that the Republican party should redefine itself with the Tea Party-goers? What do you think?

BRAD BLAKEMAN, REPUBLICAN STRATEGIST: Absolutely not. I think we‘re a party of principle. We‘re a party of platform. We‘re a party of candidates who have mainstream ideas and views. Those are the people who are going to get elected and take away Democratic seats in 2010.

SCHULTZ: Where does that leave Michele Bachmann?

BLAKEMAN: Michele Bachmann is a Republican, the same—and answerable to her district. Remember, she represents one Congressional district. We don‘t define the Democrats by the Dennis Kuciniches of the world or the Alan Graysons of the world, down in Florida. By any definition, he is a wing-nut. We shouldn‘t be painting either the Republican or Democratic party by one or two colorful individuals. Let‘s look at them in their totality.

SCHULTZ: I got to defend my buddies here. First of all, wanting health care for all Americans I don‘t think qualifies people as being a “wing-nut.” Especially when the majority of Americans actually want single payer and they certainly want the public option.

BLAKEMAN: There is a whole bunch of other people you didn‘t show who are mainstream people who came. If it wasn‘t for the Tea Party folks, we would have been forced with a health care bill that would have strapped Americans. President Obama would have had his way; nobody would have read the health care bill.

SCHULTZ: Brad, do you agree. Not really, because we‘re going to get a health care reform bill at some level.

BLAKEMAN: You said it yourself, Ed. Was the president transparent with health care? Was he or wasn‘t he?

SCHULTZ: He believe he has been. Now do you believe that Michele Bachmann is correct when she says the Republicans should redefine their party with the Tea Party-goers?

BLAKEMAN: I told you, no. She‘s not correct. But she‘s one Congress-person.

SCHULTZ: Is she out of the mainstream of the Republican party?

BLAKEMAN: She is out of the mainstream. Yes, she is, same thing as Dennis Kucinich is.

SCHULTZ: Is Michael Steele out of the mainstream?

BLAKEMAN: Michael Steele is not out of the mainstream. No. Read his book.

SCHULTZ: So he won‘t endorse any of these wacko candidates that are out there saying that this is an evil bill, like this guy from Minnesota, Mr. Quist who was saying actually—he says that Democrats are actually more of a threat than terrorists. I mean, when is the Republican party going to be accountable for the things that are being said?

BLAKEMAN: When are the Democrats going to be accountable for their wing nuts and when their people say outrageous things against Republicans, against President Bush. The Democrats blame President Bush for everything. They‘ve been in power over a year—over two years majority in the House and Senate. When does that end?

SCHULTZ: I‘ve let you say your peace. Brad, good to have you with us tonight. Thanks so much.

For more, let me bring in our panel tonight, Joan Walsh, editor in chief of Salon.com, and John Feehery, Republican strategist. Joan, when does the Republican party acknowledge that Michele Bachmann is now becoming I think the face of who they really are?

JOAN WALSH, SALON.COM: Well, she certainly is a face. I think their problem is that they don‘t have one face and, if they do, it‘s actually Dick Cheney, and that‘s very problematic. I think the Tea Party folks remind me of Sarah Palin back in the Summer of 2008, where the Republican party made a kind of deal with the devil. They needed somebody to energize the base, and all I heard from our Republican friends back then—some of them would confess doubts to me about her—but they‘d be like, she‘s energizing the base, look at her crowds.

The Tea Party is somewhat similar. You look at those crowds, they are for sure a kind of base energy that could conceivably help some Republicans. But I think mainstream Republicans are really playing with fire, because so many of them—not all of them, but so many of them are really extremists.

SCHULTZ: John, what about that? Are Republicans playing with fire talking like this?

JOHN FEEHERY, REPUBLICAN STRATEGIST: Ed, I think Joan put her finger on something that‘s right. There is a populist concern about the direction of the country. It‘s both left and right. Sometimes the left expresses itself in ways that are not good. Sometimes the right does the same way.

But there is definitely a populist concern about—I say the

Washington/Wall Street coalition that the rest of the American people feel they‘re not part of.

I do think that Michele Bachmann is correct—I will say this in one sense—that for the Republican party to be successful in the next election, they have to have a reform movement that appeals to both traditional Republicans and the Tea Party movement. They have to be more reform-minded. I think Brad is right, they need good ideas that can get broad-based support to fix the—to kind of appeal to the populists. There‘s not just right wing populists. There‘s also left wing populist.

SCHULTZ: Joan Walsh and John Feehery, time flies when we‘re having fun. Please come back.

In the phone survey I asked, do you think the Tea Party attacks are patriotic or un-American? Eleven percent say patriotic. Eighty nine percent, in the phone survey, say un-American.

That‘s THE ED SHOW. I‘m Ed Schultz. We‘re back tomorrow, 6:00 Eastern. Chris Matthews and “HARDBALL” starts right now, on the place for politics, MSNBC. We‘ll see you tomorrow night.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.